Interview

It’s all about domains… | Sophie Pieck (Sedo)

Time to read 10 Min

Venture into the bustling bazaar of the domain aftermarket — where domains transform into digital gold!

Published by

Simone Catania

Date

2024/03/05

The domain aftermarket serves as the primary playing field for most domain experts. This market is where domains are bought, sold, parked and auctioned. However, its impact extends beyond these simple transactions. Significantly, it influences the online presence and branding of major organizations, entrepreneurs and individual creatives. In essence, the domain aftermarket plays a crucial role in shaping the digital identities of businesses and individuals alike. In the domain aftermarket, one organization distinguishes itself as a leading global player: Sedo. With its unmatched expertise and broad range of services like the SedoMLS integrated into AutoDNS, Sedo has firmly established its place in the rapidly growing and competitive marketplace of domain names.

And who would be better equipped to enlighten us on the domain aftermarket than Sophie Pieck from Sedo? With an impressive career that spans various geographies and industries, Sophie’s journey in the domain aftermarket is nothing short of remarkable. Before joining Sedo, Sophie worked in the trade show industry. She was instrumental in internationalizing local trade shows and organizing satellite events in markets across China, Russia, Turkey and the US. Sophie’s tenure at Sedo took off as a Country Manager for France and Italy, providing her with a rich blend of experiences dealing with domain investors and buyers from these markets. Her role expanded as she courted opportunities in the Indian market, fostering growth and building lasting partnerships. Today, as Director of Business Development since 2017, Sophie oversees Sedo’s B2B relationships with registrars, registries and various domain service providers.

This conversation promises to be an exciting deep dive into the realm of domain aftermarket and Sedo’s pivotal role in shaping it, seen through the experienced lens of Sophie Pieck. As we turn the pages of her professional diary, we uncover valuable insights about this thriving segment of the domain industry and its ever-evolving dynamics. Join us on this journey!

1 In today’s digital landscape, domains have become a valuable digital asset. What makes them so valuable?

Domains are considered digital assets because they can be bought, sold and used as a form of online property. There are several reasons why a domain is valuable for companies, brands and investors alike:

Trust and credibility
Branding and visibility
SEO benefits

Overall, they have a competitive advantage that tremendously impacts brands. The special thing about domains, compared with conventional assets such as shares, real estate, art, and others, is that each domain is unique and cannot be reproduced at will. Even if there are dozens of brands that would like to use music.com, there can only be one company that owns it! This increases the value of domains enormously.

Why are domain names unique?
A domain name must be unique due to the operational requirements of the DNS. The DNS translates user-friendly domain names into IP addresses, which is necessary for web communication. If multiple sites shared a domain name, DNS would have difficulty directing traffic accurately, leading to potential confusion and misdirection. Thus, one-of-a-kind domain names are crucial for the accurate and efficient functioning of the DNS.

2 Working at Sedo, you must get incredible insights into the domain aftermarket. What are the unique opportunities this industry segment offers to businesses today?

All short, memorable domains, above all under legacy TLDs, are already taken. For businesses, reaching out to aftermarket platforms such as Sedo allows them to find the domain they want for their brand or marketing campaign. With almost 25 years of experience in the industry, Sedo is a trustworthy partner that can help businesses, even when the domain is not for sale, for example by reaching out to the current owner and helping to negotiate the best possible price for the domain anonymously.

Access to the right domain is crucial for any business, regardless of brand size. While the aftermarket gives access to end users to find the domain they are looking for, it also offers a wide range of opportunities for companies within the domain industry: registrars and registries, as well as website-building services, are getting access to features or services, such as

Sedo’s brokerage service, that are helping them to grow their own business, increase their revenue and keep a high level of customer retention. Connecting primary market companies with the aftermarket is a win-win situation for the whole network.

3 What are some of the critical factors that determine the value or price of a domain in the aftermarket?

There is a guiding principle similar to the real estate market: what location is to the real estate market, and what shortness is to domains.

As a longtime provider of domain appraisals, we have found that the key contributing factors to the value or price of a domain on the aftermarket are as follows:

Domain length and memorability: short, memorable domain names often fetch higher prices due to familiarity and ease of use. Memorable domains are more likely to attract direct inbound traffic. While this naturally generated traffic was critical years ago, it is now minimized by the immense use of search engines. Search engines now play a major role in determining who is at the top of the search results. Nevertheless, a short domain has advantages that can save a lot of money in a company’s marketing budget. For example, with TV advertising, every second costs money. The shorter the domain name, the lower the advertising expenditure.

Domain extension and its combination with the keyword: Well-established endings such as .com, .net, .org enjoy a high level of awareness and wide usage and have therefore been the almost undisputed favorites of customers for years. I say almost because there are, of course, also endings that suddenly stand out due to social events and developments. These include .ai or .io, for example, endings that go hand in hand with technological progress.

Other influential factors include, to name a few: The popularity of keywords, an established online presence and authority, whether domains align with popular trends, technologies or industries, similar sales data, existing traffic or revenue streams and many more.

4 What are the major trends and challenges in the domain aftermarket that businesses and domain resellers should be aware of?

The most influential trends domain resellers should keep an eye on in the coming months are AI, renewable energies and voice search. Domains or endings related to these topics will be in greater demand.

Those who want to continue to focus on short and descriptive domains in combination with the most common endings are always pursuing a good strategy. Topics such as crypto or NFTs will be less relevant. This brings us to the challenges. There are always short-lived trends, such as investing in domains with the keyword “meta,” which then cool down again after a certain period of time. In the worst-case scenario, you can be left sitting on your portfolio if you focus too much on temporary trends.

We recommend securing a few assets first and then testing how demand develops. Anyoneinvolved in the domain name business needs to have perseverance. It is not unusual to sell a domain only after eight years. But the profit margin is very high.

From a business perspective, the availability of good domains could become problematic. More and more brands are getting their desired domain for the reasons mentioned above and are spending more in order to be truly distinctive. The more these perfect ultra-premium domains are in use, the more difficult it will be for other brands to get their hands on them.

Geopolitical events and economic influences pose a further challenge. This has been demonstrated in recent years, which brought several crises. People did not have ready access to liquid financial resources and higher interest rates meant getting money or investing large sums was more challenging. This has had an impact on the purchasing power of domains. We will see how this develops in 2024.

5 How do aftermarket integrations, such as SedoMLS, aid registrars in remaining competitive and benefit their customers regarding domain access, revenue generation and service offerings?

Aftermarket integrations, such as SedoMLS, give both end users and resellers easy access to already-registered domains. With this integration, you can look for any domain listed for sale on Sedo directly on your registrar’s website. InterNetX, for instance, has had an aftermarket integration with Sedo through AutoDNS since the beginning. Users can search for aftermarket domains directly through AutoDNS and place their domain in the basket. It’s just as easy as that. And what’s more, users can also list their domains for sale on Sedo through AutoDNS.

Using the aftermarket integration of SedoMLS allows registrars to remain competitive by generating new revenue streams and satisfying the needs of their customers. Two out of three customers who buy an aftermarket domain will not only register their domain for several years, but purchase value-added services offered by their registrar. By allowing customers to list their domains for sale and monetize them on the aftermarket, registrars can increase their renewal rate.

6 Artificial intelligence has been rapidly advancing and transforming various industries. Does AI play in the domain aftermarket already?

Sooner or later, AI will play a critical role in every industry. In the domain industry, the topic is being met with great enthusiasm. Think of AI when searching for suitable domains, managing and evaluating domains, etc. The list is endless. It will be interesting to see how much of this can be implemented, how much will be of use, and where it can’t replace human power. While the topic of AI is already well-advanced in some areas, many companies still need to catch up. They first need to define an AI strategy for their company. It will be some time before that happens.

7 How have you seen the domain aftermarket evolve during your tenure at Sedo and what is your vision for the future of the domain aftermarket?

I started working at Sedo during an exciting time for the industry, as it was a period when hundreds of new gTLDs had been launched and entered the domain landscape. During that time, the industry started increasing interest in promoting those new premium domains in the secondary market. Over the past ten years, there has been a shift where both registries and registrars understood the increasing value of entering the secondary market by listing their inventory on Sedo or offering Sedo’s domain inventory to their end-users.

Our inventory, with 24 million domains for sale, has been growing year over year. Such has been the demand for premium domains! Especially during the pandemic, we saw a significant increase in aftermarket sales for highly valuable domain names. But users can also find more affordable domains on the aftermarket as Sedo has been extending its partnerships with businesses listing their expiring domains for sale.

Moving forward, I believe the domain aftermarket and primary market will merge more and more. Registrar businesses and other domain service providers understand the importance of keeping their customers, being able to offer them a solution for their domain needs, and avoiding “dead-end searches.” Aftermarkets such as Sedo help with that, which is why more and more registrars are integrating our aftermarket services. Sedo is helping close this gap and help registrars or other providers offer the best service to their customers.

So many users are looking for a great domain that fits their needs and Sedo will keep helping them get the domain they are looking for.

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